Answer:
$800
Explanation:
<em>Under the FIFO system , inventories are priced using the price of the oldest batch in the stock, after which the price of the next oldest batch and this is done in turn. It is based on the principle that the first batch that arrives the store should be issued first.</em>
So we can work the cost of the closing balance in this question using the table below
Date Description Qty unit ($) Value
Sept 1 Bal b/f 20 × 20 = 400
4 Sales ( <u>10)</u> × <u>20 </u> <u>200</u>
10 200
10 Purchase <u>30</u> × 25 = 7<u>50</u>
<u> </u> 40 950
17 Sales ( <u> 20)</u> <em>Wk 1</em> = (<u> 450)</u>
20 500
30 Purchases <u>10 </u> × 30. = <u>300</u>
Closing inventory 30 <u> 800 </u>
<em>Notes / Working</em>
1. The 20 units sold on September 17 will be valued as follows:
<em>10 units × $20 = $200</em>
<em><u>20</u></em><em> units × $25 =</em><em><u> $250 </u></em><em> </em>
<em> </em><em><u>30</u></em><em> </em><em><u>$ 450 </u></em><em> </em>
<em> </em>
The Cost of the merchandise inventory of 30 units on September 30 =
$800